FIT 2, a wholly-owned subsidiary of IREIT Global, has entered into a conditional sale agreement with Decathlon to acquire a portfolio of 27 retail properties in France for a purchase consideration of approximately EUR110.5 million ($176.97 million).
The acquisition marks IREIT Global’s first foray into France. The gross lettable area for the portfolio totals 95,477 square meters.
All of the properties will be leased back to Decathlon through a sale and leaseback agreement, says the manager of the REIT in an April 27 media release. The agreement terms include a committed occupancy of 100% with weighted average lease expiry by gross rental income of 10 years.
The REIT’s manager says that the acquisition will be financed through an equity fundraise which may comprise a private placement of new IREIT units or a non-renounceable preferential offering to existing unitholders, or both.
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The manager also states that key strategic investors, including City Developments (CDL), have pledged to subscribe in full for units issued under a preferential offering. CDL has also undertaken to subscribe to excess units, which would result in its total subscription amount would equal $59 million of the preferential offering units.
In the event that market conditions are ‘non-conducive, the acquisition may also be funded by borrowings, the manager says.
The proposed acquisition is expected to be completed by 3Q202, subject to fulfillment of conditions precedent.
Louis d’Estienne d’Orves, CEO of the manager, says, “Following IREIT’s acquisition of four Spanish properties completed in October 2020, we are pleased to announce that we have secured another attractive portfolio of properties. The proposed acquisition will extend our presence to France and a new asset class, as IREIT’s current portfolio comprises office properties in Germany and Spain."
Units in IREIT Global closed flat at 65 cents on April 27.